Global Meat Output to Fall as Fever Ravages China Pig Farms

According to a report from the United Nations, meat production is expected to fall for the first time in two decades because of pork production declines. Thee is still expected to be growth in chicken and beef. ( Paul Morris, Bloomberg )

Meat production is likely to fall for the first time in two decades because of a deadly disease that’s wiping out Chinese hog herds.

That’s according a report from the United Nations, which said African swine fever will have far-reaching effects in food and agriculture markets around the world. As a whole, farmers will produce 0.2% less meat this year.

More than 1 million hogs have been culled in China since the outbreak began and some analysts are predicting that the country, the world’s top hog producer, will lose 30% of its herd this year. For all the recent fanfare about younger consumers going vegan and Beyond Meat Inc.’s blockbuster IPO, it’s not enough to move the needle when it comes to global meat consumption.

The decline in meat supply this year would be a small dip after years of steady growth as rising incomes and higher standards of living in the developing world mean more people are able to afford foods that were once a rare luxury. Meat production has increased about 45% since 2000, according to the UN.

For now, the pig disease in China is having the biggest impact on pork production, with the decline in pork offsetting growth in supplies of chicken and beef. The virus -- which isn’t known to harm humans -- has spread nationwide and there’s no indication that it’s under control yet.

The U.S. Department of Agriculture in April forecast a drop of 134 million head -- equivalent to the entire annual output of American pigs -- and the worst slump since the USDA began counting China’s pigs in the mid 1970s.

China’s increased demand for imports helped push a gauge of global meat prices up 3% to a one-year high in April, sending a measure of overall food prices up for a fourth month, the UN’s Food & Agriculture Organization said in a separate report Thursday. June hog futures are up almost 9% this year in Chicago.

Here’s how the African swine fever outbreak is impacting agriculture, according to the FAO:

Soybeans and Feed

China is the world’s largest importer of soybeans, and half of its purchases end up as pig feed, so fewer hogs could take a toll on demand. The FAO said corn and cassava could also see lower feed demand.

Milk

China is the world’s top importer of whey powder, which is used as animal feed for piglets. As the country’s hog herd shrinks, that will mean lower whey imports.

Chicken

Chicken companies could turn out to be the big winner. Chinese shoppers may switch to poultry, the most popular and cheapest meat, as pork becomes more expensive. Poultry output may rise 2.8 percent this year, faster than the increase in beef and lamb. At the same time, lower soybean prices will likely reduce the cost of making chicken feed.

 
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